German retailer KarstadtQuelle's bank debt traded up on rumors its main shareholders are planning to acquire and delist the company. Its second-lien term loan climbed nine points to the 104-106 range, while its senior secured term loan "B" traded up a point to the 97-98 range.
A delisting would be positive for the second-lien debt holders because they would be paid back above par based on a call provision contained in the credit. The company has also posted good sales figures, helping to boost trading levels. Last week, the company said it had generated sales growth for the first time in ten years. In 2005, sales in its department and sales stores increased 1.2% to EUR1.5 billion.
KarstadtQuelle, which is Europe's largest department store and mail order group, took a number of steps to reduce its debt last year, including the sale of real estate assets. In 2005, its group net liabilities fell to EUR2.7 billion, compared to EUR3.9 billion in 2004. In December, it sold 40 properties for more than EUR400 million. A company spokesman did not return calls.